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Auto Deceleration Depresses August Retail Sales

U.S. retail sales dropped unexpectedly in August, according to data released last Friday by the the U.S. Census Bureau, primarily due to a decline in auto sales.

Total retail sales dipped .2% from July to $474.8 billion last month, a 3.2% increase over August 2016’s $460.2 billion.

On a 12-month smoothed basis, retail sales rose by 1.7%, their smallest increase since March 2016.

Sales at department, chain and discount stores were virtually flat with the prior month, at $12.6 billion, but dropped by 1.3% compared to August 2016. On a 12-month smoothed basis, sales rose by 0.5% which, though small, was the second consecutive positive month since March 2015.

Sales at clothing and accessories specialty stores rose by .6% compared to the year-ago period, to $21.6 billion, and increased .6% on a 12-month smoothed basis.

Sales of the combined department, chain, discount and specialty sectors, where most of the traditional retail apparel business is done, fell negligibly to $34.3 billion.

Inventory in department and specialty stores seems to be under control, despite the numerous store closures taking place. The inventory to sales ratios for the two channels have actually declined slightly in recent months.

Sales in the non-store retail sector, which includes pure-play e-commerce, increased by a modest 6.7% in August to $51.7 billion, the first single-digit increase in the measure in more than two years.

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